Ms. Kosmas introduced
the following bill; which was referred to the
Committee on Transportation and
Infrastructure, and in addition to the Committee on
Financial Services, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned

A BILL

To direct the Secretary of Commerce to establish an
early-stage business investment and incubation grant program, and for other
purposes.

1.

Short title

This Act may be cited as the
Early-Stage Business Investment and Incubation Act of
2010.

2.

Early-stage
business investment and incubation grant program

(a)

Establishment

Not later than 60 days after the date of
enactment of this Act, the Secretary of Commerce shall establish an early-stage
business investment and incubation grant program (in this section referred to
as the program) to support the development of early-stage
businesses in targeted industries.

(b)

Grant
authority

(1)

In
general

In carrying out the program, the Secretary is authorized
to make grants to covered business incubators.

(2)

Grant
amounts

(A)

Non-Federal
capital limitation

A grant
made to a covered business incubator under the program may not be in an amount
that exceeds the amount of the incubator’s capital that—

(i)

is
not from a Federal source; and

(ii)

is
available for investment and incubation services on or before the date on which
a grant is drawn upon.

(B)

Aggregate amount
limitation

The aggregate
amount of all grants made to a covered business incubator under the program may
not exceed $5,000,000.

(c)

Grant award
process

In making a grant
under the program, the Secretary shall commit a grant amount to a covered
business incubator and the amount of each such commitment shall remain
available to be drawn upon by such incubator during the 5-year period beginning
on the date on which each such commitment is first drawn upon.

(d)

Use of
grant

(1)

In
general

A grant made under
the program may be used by a covered business incubator for the
following:

(A)

Making an
investment in an early-stage business in a targeted industry.

(B)

Providing
training, counseling, and other assistance to an early-stage business in a
targeted industry to support the development of the business.

(C)

Providing
purchased services to an early-stage business in a targeted industry.

(D)

Conducting due
diligence activities.

(E)

Meeting
operational expenses.

(2)

Limitations

(A)

Purchased
services

Not more than 20
percent of the amount of a grant made to a covered business incubator under the
program may be used by the incubator to provide purchased services to an
early-stage business in a targeted industry.

(B)

Due diligence
activities

Not more than 6
percent of the amount of a grant made to a covered business incubator under the
program may be used by the incubator to conduct due diligence
activities.

(C)

Operational
expenses

Not more than 5
percent of the amount of a grant made to a covered business incubator under the
program may be used by the incubator to meet operational expenses.

(3)

Designation of
grant uses

In the application of a covered business incubator for
a grant under the program, the incubator shall notify the Secretary of the
percentage of the grant amount that will be used for each of the activities
described in subparagraphs (A) through (E) of paragraph (1) and provide a
detailed description of the activities to be undertaken.

(e)

Grant
conditions

(1)

Fund
Manager

As a condition of
receiving a grant under the program, a covered business incubator shall
designate an individual as the fund manager for the grant amount, who shall
administer and be responsible to the Secretary for information with respect to
the grant amounts received.

(2)

Investment
committee

As a condition of
receiving a grant under the program, a covered business incubator shall
establish an investment committee composed of not less than 5 individuals (3 of
whom may not be employed by or related to the incubator or an affiliate of the
incubator) that shall—

(A)

review proposals
for and advise the incubator on the use of grant funds;

(B)

provide letters of
support and reference to the Secretary with respect to proposals for the use of
grant funds by the incubator; and

(C)

submit periodic
reports to the Secretary on the results of activities carried out with grant
funds.

(3)

Collaborator

As a condition of receiving a grant under
the program, a covered business incubator shall assign to each early-stage
business in a targeted industry that is assisted with grant amounts a
collaborator who shall be an individual not employed by or related to the
incubator or an affiliate of the incubator and who shall assist the incubator
in providing support to the business.

(f)

Federal share of
activities

The Federal share of the cost of an activity carried
out by a covered business incubator with the assistance of a grant under the
program shall not exceed 75 percent of such cost.

(g)

Monitoring and
evaluation

(1)

In
general

The Secretary shall
assess the effectiveness of covered business incubators that receive a grant
under the program.

(2)

Data from
incubators

Not later than 120 days after the date of receiving a
grant under the program, a covered business incubator shall provide to the
Secretary information on the activities of the incubator and on the businesses
assisted under the grant, including—

(A)

the number of jobs
created by the businesses;

(B)

the amount of taxes paid by the businesses
and the employees of the businesses; and

(C)

other data that,
as determined by the Secretary, may be used to measure the value of assistance
under the program.

(h)

Authorization of
appropriations

(1)

In
general

There is authorized to be appropriated to carry out the
program—

(A)

$250,000,000 for
the first full fiscal year beginning after the date of enactment of this Act;
and

(B)

such sums as may
be necessary for subsequent fiscal years.

(2)

Prohibition on
earmarks

None of the funds appropriated for the program may be
used for a congressional earmark as defined in clause 9(e) of rule XXI of the
Rules of the House of Representatives.

(i)

Definitions

In
this Act, the following definitions apply:

(1)

Covered business
incubator

The term
covered business incubator means a public or private
not-for-profit organization, including an academic institution, that—

(A)

operates a program
providing assistance to early-stage business in targeted industries to support
the development of those businesses;

(B)

has a physical location and on-site
management for the program described under subparagraph (A); and

(C)

has procedures for
selecting businesses for and graduating businesses from the program described
under subparagraph (A).

(2)

Due diligence
activities

The term due
diligence activities means activities undertaken to analyze and assess
the desirability, value, and potential of an opportunity to provide assistance
to an early-stage business in a targeted industry.

(3)

Early-stage
business in a targeted industry

The term early-stage business in a
targeted industry means a small business concern that—

(A)

is domiciled in a
State;

(B)

has not generated gross annual revenues
exceeding $15,000,000 in any of the previous 3 years; and

(C)

is engaged
primarily in researching, developing, manufacturing, producing, or bringing to
market goods or services with respect to any of the following business
sectors:

(i)

Agricultural
technology.

(ii)

Energy
technology.

(iii)

Environmental
technology.

(iv)

Life science
technology.

(v)

Biotechnology.

(vi)

Information
technology.

(vii)

Digital
media.

(viii)

Clean
technology.

(ix)

Defense
technology.

(x)

Photonics
technology.

(xi)

Electronic
technology.

(xii)

Semiconductor
technology.

(xiii)

Material
science technology.

(xiv)

Aerospace.

(xv)

Communications.

(xvi)

Transportation.

(4)

Operational
expenses

The term operational expenses means the
costs of operating an incubator, including overhead and management
expenses.

(5)

Purchased
services

The term
purchased services means any training, counseling, or other
assistance provided to an early-stage business in a targeted industry that is
provided by a covered business incubator through an agreement with another
entity, and not by the incubator directly.

(6)

Secretary

The terms Secretary and
Secretary of Commerce mean the Secretary of Commerce acting
through the Assistant Secretary of Commerce for Economic Development.

(7)

Small business
concern

The term small business concern has the
meaning given that term in section 3 of the Small Business Act (15 U.S.C.
632).